Payment Culture in the UK Hospitality & Leisure Sector
The UK Hospitality & Leisure sector is one of the most vibrant and diverse industries in the country. From small family-run cafes to large hotel chains, the sector employs millions of people and contributes significantly to the UK economy. However, small businesses in this sector face a range of challenges, including slow or late payment, which can have significant impacts on their operations and financial stability.
The impact of slow or late payment can be particularly severe in the Hospitality & Leisure sector, where businesses must often pay upfront for goods and services such as food and drink, equipment, and rent. This means that delays in payment can quickly escalate into cash flow problems, which can ultimately lead to insolvency.
In addition to financial strain, slow or late payment can also cause other problems for small businesses in the Hospitality & Leisure sector. For example, it can result in difficulties in sourcing supplies or equipment, as suppliers may be reluctant to provide goods or services to businesses with a history of late payment. It can also lead to reputational damage, as customers may lose trust in businesses that struggle to pay their bills on time.
As the sector moves towards recovery post the Covid-19 pandemic, it seems from the payment culture chart that there has been a broad effort to improve payment times in the sector, with the exception of Loungers, who increased their average time to pay from 55 days to 84 days. However, this is a sector that relies on collaboration and partnership to deliver great customer service and the movement towards faster paying will only help the sector recover and grow faster.
In conclusion, slow or late payment remains a significant challenge for small businesses in the UK Hospitality & Leisure sector in 2023. However, by taking proactive steps to manage cash flow and access support services, businesses can reduce the risk of financial strain and reputational damage and ensure their long-term success.